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Appendix D: "Leveraging Public Investments with Private Sector Partnerships: A Review of the Economics Literature"
Pages 141-170

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From page 141...
... From the literature, we identified five institutional forms of public-private collaboration: (1) government supported industry consortia; (2)
From page 142...
... ; (2) potential risks to the participants (conflicts of interest, comprising public trust, legal liability, loss of proprietary information, compromising the research and educational mission of universities)
From page 143...
... Governmental entities include intergovernmental agencies, such as the United Nations, World Bank, and World Health Organization (WHO) , national governments, and specific agencies within national governments.
From page 144...
... provide good treatments. A second reason for government involvement in R&D partnerships is to foster economic growth by mitigating market failure in research and innovation markets.
From page 145...
... laboratory and a private firm. Further, legal liability issues are an additional risk to governmental entities, particularly in R&D partnerships directed toward drug development.
From page 146...
... Industrial organization theory focuses on the potential market failure in research and innovation markets due to knowledge and consumer surplus spillovers. A standard result in this literature, mentioned above, is that private firms under-invest in R&D from a social welfare standpoint.
From page 147...
... suggest that firms gain methods and tools and not specific products or research findings from their collaborations with ERCs. Finally, firms participating in public-private partnerships can improve their corporate image.
From page 148...
... "Open science" refers to the free expression, exchange, and dissemination of new ideas. Threats to the free exchange of ideas from industry collaboration include limitations on the disclosure of research findings in the form of database restrictions or confidentiality agreements, publication delays and decreased communication between faculty or faculty and students.
From page 149...
... At the same time, they are typically very resource-constrained and limited in the organizational and financial contributions they can make to an R&D partnership. One type of potential benefit to these organizations occurs when a foundation uses or "piggybacks" on the peer review process of the federal agency as a project selection mechanism, which saves the foundation the expenses of the application and peer review processes.
From page 150...
... In the United States, the legal framework that allows competitors to undertake cooperative R&D was established in the 1980s. The National Cooperative 3R&D consortia are a subcategory of research joint ventures (RJVs)
From page 151...
... The act establishes a rule of reason approach for antitrust proceedings that balances the procompetitive and anticompetitive effects of the research joint venture. The act also protects firms from treble damages in private antitrust suits as long as the research joint venture is registered with the Department of Justice (Scott, 1989; Katz and Ordover, 1990; Mowery, 1998; Hagedoorn et al., 2000)
From page 152...
... Using an indicator for the extent of technology transfer activities at a center as their explained variable, the authors' regression results show that greater trust significantly increases technology transfer activities. Geographic proximity and more generous university IP policies are also found to significantly increase technology transfer.
From page 153...
... . However, in a CRADA, federal laboratories enter into a contractual arrangement with a private firm to develop a technology and are not required to reveal any proprietary information.
From page 154...
... For the private firm, a partnership with NIH gives it access to novel gene therapy techniques developed by NIH scientists. Similarly, NIH researchers gain from their private partners access to "proprietary reagents or to commercial-scale facilities for the production of potential new drugs" (Guston, 1998:231)
From page 155...
... . Under a MTA-CRADA, NIH researchers can acquire proprietary research tools from private partners, but the scope of the agreement is much broader than a simple material transfer agreement.
From page 156...
... Employing USDA's research classification system, the authors estimate the amount of research resources allocated to five technology areas. Since the five technology areas are broadly representative of agricultural research and show sufficient variation in social and private benefits, the authors assume that a large share of private research will be devoted to those areas with a large private-good component, whereas the public sector will be more focused on areas with high social returns.
From page 157...
... . The SBIR program was established in the Small Business Innovation Development Act of 1982.
From page 158...
... NIST laboratories are not allowed to participate in the ATP program. ATP awards are given to single firms or industry-led joint ventures.
From page 159...
... . Noting that only 15 percent of federally registered Research Joint Ventures involve a university partner, Hall et al.
From page 160...
... Partnerships in International Health Public-private partnerships (PPPs) designed to address the research needs of developing country health are a recent phenomenon (Buse and Walt, 2000)
From page 161...
... The scientific and technological capacity of the private firms in developed countries has been strengthened considerably over the years, due in large part to greater technological opportunities and stronger patent rights, but the public research sector in developing countries has remained weak. Funding constraints, low scientific capacity, and problems in gaining access to the most productive research tools has meant that public-sector researchers in developing countries have been unable to provide indigenous solutions to infectious diseases in their countries.
From page 162...
... As with any venture capital, the partnerships screen potential projects for feasibility and disburse funds to selected projects. The Global Alliance and MMV use competitive calls for project proposals to identify promising research areas, whereas in the IAVI case, staff members seek and develop projects based on information from scientific meetings and the published literature and on the advice of experts.
From page 163...
... Medicines for Malaria Venture: To discover, develop and commercialize antimalarial drugs at a rate of one new product every five years and at prices that are afford able to the most affected populations Partners/Donors include: Association of British Pharmaceutical Industries, International Federation of Pharmaceutical Manufacturers Associations, Wellcome Trust, Rockefeller Foundation, WHO, World Bank, Global Forum for Health Research, DFID, and Swiss Development Corporation. Global Alliance for TB Drug Development: To accelerate discovery and/or develop ment of cost effective new tuberculosis (TB)
From page 164...
... While there are several ways that public research institutes or local firms can obtain patented biotechnology genes and tools, partnerships are being increasingly used as a mechanism to transfer proprietary technology from the private to the public domain. In return, the private firm gains access to the public sector's germplasm, plant variety assessment infrastructure, and the
From page 165...
... Another recent initiative is the IP-clearinghouse program in the United States, which has the goal of making IP from universities and government research institutes more readily available. This program seeks to design a toolbox of biotechnologies for public sector researchers in industrialized countries.
From page 166...
... For the public firm, there is risk to its reputation from associating with private firms and developing controversial technologies. Since public sector research organizations are supported by taxpayers, any association with a private firm that is perceived to benefit unduly the private firm may lead to unwelcome scrutiny.
From page 167...
... While CDMRP might design a collaborative mechanism based on one of these institutional forms, it seems inevitable that the current structure of vision setting and project selection will need to be changed to incorporate, to some degree, the interests of private partners. Depending on how the collaborative arrangement is structured, any number of risks might be introduced, including conflicts of interest, issues of public trust and program credibility, legal liability, and research reorientation away from high risk basic research toward more developmental and applied objectives.
From page 168...
... Small Business Innovation Research Program (SBIR) ." Small Business Economics, 20:129-135.
From page 169...
... 2003. "National Survey to Evaluate the NIH SBIR Program," Department of Health and Human Services, July 2003.
From page 170...
... 2004. "Public-Private Partnerships in Agricultural Research: An Analysis of Challenges Facing Industry and the Consultative Group on International Agricul tural Research." EPTD Discussion Paper No.


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